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January 26, 2023

With RxPass, Amazon is looking to grow its pharmacy business

Amazon’s enlargement into health treatment will come as the e-commerce large faces a person of its most challenging durations in its heritage. Past yr, the firm witnessed a slowdown in its core e-commerce business enterprise, and it has also started a massive cost-slicing overview, indicating the business is getting ready for a further more slowdown.

Industry experts advised Modern-day Retail this new subscription drug presenting alerts an acknowledgment of Amazon’s evolving purchaser foundation. Just one qualified explained to Contemporary Retail that Amazon is hoping to develop its wallet share by including this new benefit for Key customers. And a lot more broadly, Amazon’s providing also signifies a bigger change to convey down drug rates forward of the rollout of the Inflation Reduction Act in 2025. The two governing administration subsidies and individual out-of-pocket fees are anticipated to be significantly decreased as a end result of the monthly bill.

“I believe portion of it is recognition of what is happening demographically in this region. We’re all having more mature and sicker. And if you’re Amazon and you want to stay dominant for the upcoming 20 several years and not be disrupted, then you can not afford to pay for any longer to overlook well being care,” Christina Farr, a overall health technological innovation investor at Omers Ventures informed Contemporary Retail.

“There’s this stress on the pharmaceutical and drug marketplace to deliver drug costs down. And, as a result, you see individuals like Amazon, Walmart, CVS, all of the stores that have pharmacy property, commencing to set choices in the market. That puts pressure on bringing some of individuals drug prices down for customers,” claimed Kate McCarthy, vice president of Gartner’s wellness treatment and daily life science business study workforce.

Amazon first acquired into the prescription area in 2018, when the company ordered on the internet pharmacy PillPack. Amazon inevitably released its individual pharmacy company in 2020 to attract consumers made use of to viewing the community pharmacy by leveraging the ease of its Primary transport services. Shoppers use Amazon’s support to manage prescriptions and find payment procedures. Amazon also manufactured its prescription medication purchasing and success provider out there on mobile equipment.

“They [Amazon] have not experienced as much volume in the pharmacy enterprise as they would like. So, putting some thing significantly extra competitive in the current market could enable them to get additional of their faithful consumer foundation that presently has Prime to commence employing their pharmacy provider,” mentioned McCarthy.

Farr, meanwhile, explained that the launch of RxPass — and Amazon’s efforts in the pharmacy room far more broadly — need to all be seen as component of an built-in approach to grow to be the “digital entrance doorway for overall health care.”

Over the yrs, Amazon has been doubling down on its foray into health and fitness care in other ways. In July of last 12 months, Amazon announced it was obtaining Just one Healthcare, an operator of major-treatment clinics, in a offer truly worth $3.9 billion. In 2019, the corporation launched Amazon Treatment, a telemedicine and most important care provider. At first, it was only for Amazon workforce. But Amazon experimented with to supply it to other company consumers. In the end Amazon terminated its Care solutions unit at the finish of 2022, simply because it was not a sustainable, lengthy-phrase resolution for its company prospects.

Independently, last year, the organization also released Amazon Clinic, a information-primarily based telehealth company that offers distant remedy for allergy symptoms and heartburn.

“I assume the motive pharmacy was the space that vendors entered into initial, no matter whether it was CVS, Ceremony Assist, or just about each individual other retailer, was simply because it is a source chain business enterprise. Stores already control source chain as component of what they do. And so it is the closest parallel to their business. And after they sense like they have a sense of the pharmacy small business, and once they’ve figured out how to securely handle individual data, well, then relocating to factors like immediate care and so on,” discussed McCarthy.

Farr extra that portion of the reason why Amazon moved into the health care sector was to tackle the modifying requirements of its buyers, notably with millennials who use its Key assistance. “Millennials are acquiring more mature also — we’re shifting into our 30s and 40s, and increasingly getting drugs. So this, to me, is a additional of a recognition of that, the desires of the main customer foundation and adapting to them,” included Farr.

McCarthy added that Amazon’s new plan is a “substantial effort” to transform the financial forces in prescription shipping at a time when there is an inflow of new choices from other rivals in the industry in progress of the 2025 inflation Reduction Act measures.

For case in point, McCarthy pointed out that billionaire Mark Cuban’s latest endeavours to disrupt the pharmaceuticals sector — via his Price As well as Drug Enterprise — could possibly compete with Amazon’s most current supplying. In October 2021, Charge Moreover Drug Firm launched a new pharmacy-profit administration companies with a nonprofit alliance of almost 40 large public and non-public companies to handle prescription-drug benefits. Individually, the Mark Cuban Expense Furthermore Drug Organization declared a partnership in January with RxPreferred Rewards concentrated on strengthening healthcare obtain and reducing prescription drug invest.

Some of the difficulties that Amazon will have to contend with heading forward consist of regardless of whether or not the firm wants to develop into extra high-priced drugs for exceptional conditions. Additionally, how it discounts with the drug sector middlemen, referred to as PBMs, and the economics of well being coverage.

“Is it cheaper to use your coverage or not? Occasionally the copay is additional costly than what it would have just been to shell out hard cash. All of that is complicated. And then you could see some of the extra regular players form of combating back again against [Amazon],” pointed out Farr.

Amazon’s new featuring is also yet another way to get Prime customers to expend additional. Amazon initial launched its Key subscription in February 2005 at an preliminary price tag level of $79 a yr, featuring unrestricted two-day shipping and delivery. But right now, the Primary membership program is evolving beyond a mere buying plan or a shipping and delivery system. The organization has far more not long ago been transforming its approach and creating out a set of softer characteristics and positive aspects connected to shaping the media usage routines of its members.

Finally, McCarthy explained this new featuring is far more of a way for Amazon to get its present clients to invest far more with the e-commerce huge. “They do want new buyers, but typically they’re striving to get their loyal buyer base to spend far more with them,” she said.

January 26, 2023

How to Start a Vending Machine Business

Vending machines are easy to spot in malls, offices, bus stations and laundromats. Earning less than a dollar on every bag of chips or energy drink may not seem very profitable, but the vending machine industry can be an excellent source of income. This article provides you with all the necessary details on how to start a vending machine business.

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The advantages of owning a vending machine business

Starting a vending machine business comes with plenty of upside. After setting up your machines in the locations you choose, the vending machines will do the selling for you. Let’s examine some of the main benefits of getting started in the vending machine industry.

Experience isn’t required

You don’t need a college degree or previous work experience to run a successful vending machine business. The beauty of it lies in its simplicity; you can be up and running with one or two machines. Moreover, it isn’t difficult to change products and locations to better suit your market. As you gain further insights into the vending machine industry, you can scale your business by scouting potential locations and increasing the number of vending machines.

Low startup costs

Most startups need a lot of capital in the beginning. Renting office space and hiring employees can deplete your savings before you’ve even started running your company. In a vending machine business, you don’t need to worry about overhead costs concerning rent or employee payments.

The three main costs for running a vending machine business are the machines, the products you’ll stock them with and any necessary repairs. You can purchase items wholesale to further cut down on your expenses. For a few hundred dollars, you can buy a vending machine and start selling.

Generates passive income

Passive income refers to the practice of business owners earning money without actively managing their business. Although vending machine businesses require some time for traveling, stocking and maintaining the machines, your profits will roll in on their own.

Vending machines can also make sales 24 hours a day without being managed. So, setting up vending machines in effective locations is a great way to make money from home as a full-time job or as an extra source of income.

How to start your own vending machine business from scratch

There is more than one way to get into the vending machine industry. For example, you can take over a business with an established batch of machines to start. Although this method requires a lot of capital upfront, it may be worth it. Not only will you inherit the previous owner’s machines but often you’ll inherit their existing customer accounts and revenue streams.

If you choose this route, be sure you understand why the previous owner wants to sell the business before agreeing to anything. Problems with existing customer contracts, locations or machines can cause headaches in the long run.

A second option is to buy into a franchise. Since you’ll be working from an established framework, this reduces the number of business decisions you need to make and you’ll also gain experience as a vending machine operator much faster. However, keep in mind that your franchisor likely charges upfront fees and takes a percentage of your earnings every month.

If those options aren’t appealing, starting your vending machine business from scratch allows for more flexibility. When starting your own vending machine business, there are specific steps you should consider taking.

Form a legal entity

Before buying a vending machine, you should set up a legal entity and register your vending machine business in your state. Depending on your preference, you can register your business as a limited liability company (LLC), an S Corporation or a C Corporation. Setting up a legal entity allows you to open a business checking account and can protect you from lawsuits.

It is possible to run a vending machine business as a sole proprietor or in a partnership, but there are specific risks you should be aware of. It may be more difficult to receive loans and financing from banks, such as LLC loans. Also, you would shoulder all personal responsibility for your business’s legal, financial and tax problems. It may be worthwhile to consult with an attorney to decide which option is right for you.

Buy your vending machines

When the time comes to buy a vending machine, there are many things to consider. If you are unsure how to buy a vending machine, a quick search online can connect you with a manufacturer or wholesaler.

How much does a vending machine cost? It depends on the machine type and the seller. Manufacturers and wholesalers have many new machines available, but these are also the most expensive options. Trying to find a refurbished or used vending machine for sale will be more affordable and may better suit your needs. You can always search for online resellers or buy from a former machine owner on a third-party platform like eBay at a lower cost.

However, depending on the vending machine you choose, it may be hard to pay out of pocket. That’s why the following options may be more feasible:

Small business loans: Entrepreneurs with limited financial means or grand ambitions should consider small business loans. Short-term loans are an excellent option for startups and usually must be paid back in 18 months or less. They have higher monthly payments than long-term loans, but you’ll pay less interest in the long run.

Equipment financing loans: With these loan types, the lenders allow you to buy business-related machinery for your startup. They will charge you interest and consider the cost of your vending machines. If you default on loan payments, your machines may act as collateral.

Lease: Some companies lease vending machines. Contracts usually last between two and five years and can be a way to get started if you need help financing the vending machine you want. Expect fixed monthly payments to the leasing company for the entirety of the contract.

Once you have your finances in order and are ready to buy a vending machine, you will need to determine which kind works best for your business. Although vending machines vary significantly, there are three main types.

Mechanical vending machines

Most of the classic snack or soda vending machines fall into the category of mechanical vending machines. These machines are commonly seen in public spaces such as office buildings, motels and airports. While the sizes and capacities of mechanical vending machines differ, most can hold multiple products at various prices. Refurbished mechanical vending machines typically cost around $1,500, making them a possible entry point for first-time entrepreneurs.

Electronic vending machines

Electronic vending machines are the most expensive type of vending machine available. Some machines stock products ranging from bottled water to headphones while others — such as coffee vending machines —can prepare beverages.

Newer versions of these vending machines come with state-of-the-art technology like interactive touch screens and remote monitoring software. Customers can make payments with cash, credit cards, or smartphones and, in some cases, even using facial recognition. Electronic vending machines start around $3,000 and can go as high as $10,000 depending on its features.

Bulk vending machines

Bulk vending machines sell a single product. Common bulk vending machines are gumball or toy vending machines. These coin-operated machines don’t need any electricity to function. Because they only cost a few hundred dollars at most, they are a great way for you to test the vending machine market.

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Decide what items you want to sell and find suppliers

Choosing the right product is vital for running a successful vending machine company. As products in machines can range from tech accessories to skincare lotions, conducting market and industry analysis is essential.

Additionally, tailoring your products to a location-specific audience yields the best results. Providing laundry detergent at a laundromat, protein bars at a gym or pet treats near a dog park will turn a profit.

Remember, higher-priced items don’t always bring in the most profit. A customer may visit the same beverage vending machine multiple times a day but they may only buy a product once a month from a shampoo vending machine.

Some vending machine products include:

Towels
Flash drives
Over-the-counter medications
Novelty items
Sunscreen
Candy bars
Stuffed animals

Once you’ve decided on your product, finding a wholesaler is next. Networking and making good connections with wholesale suppliers is the best way to get your supplies in bulk. Some providers also offer contracts to furnish and maintain your machines if you agree to purchase all supplies from them.

Choose high-traffic, profitable locations

The locations of your vending machines are just as crucial for running a successful business as product selection. Areas of high foot traffic provide more chances for a sale, so you may want to consider your options wisely. Finding a great location will take a bit of scouting and creativity, especially as you may run into already-established competitors.

Networking and connecting with local business owners can be beneficial in this situation and allows you to take advantage of unexplored opportunities. Cold calling is another option to gauge property owners’ interest in adding a vending machine to enhance their space.

Possible vending machine locations include:

Apartment complexes
Office buildings
Grocery stores
Truck stops
Sports complexes
Car dealerships
Manufacturing facilities

In most cases, you will need to pay an agreed-upon amount between 5{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} to 25{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} of your profits to the property owner or manager. If this sounds like too high a percentage, you can also try to value-sell your business. A value-sell works by convincing the property owner to allow you to place your vending machine on their property for free because of the positive impact it will bring to the location’s tenants and customers. It’s a challenging feat, but it may work in some places.

After agreeing on terms with the proprietor, you must draw up and sign a contract. Some contractual conditions to include are:

Compensation rate
Contract length
Rights to add, remove or replace machines
Provisions for a breach of contract
Exclusivity clause

It is best to have a lawyer review the contract before signing it.

Stock your machine and start making sales

Once you decide which products you’ll sell and where the machines will go, it’s time to start making money. Make sure to set your prices competitively to attract customers and maximize profits. Many states require vending machine business owners to charge a sales tax, so consider this when finalizing your prices.

What else is involved in owning a vending machine business?

Once you register a business, decide on a product, purchase a vending machine and scout a location, you can start your journey as a vending machine business owner. Here are a few more things to consider while running your business.

Repairs and maintenance costs

Keeping your machines clean and in working order is one essential aspect of the vending machine business. A dirty vending machine will not attract customers and a malfunctioning vending machine will not make any profit.

One solution to these problems is hiring a vending machine operator, which can save you time. But if you want to save money, you can also learn how to repair and maintain the vending machines yourself.

You should also consider possible acts of vandalism and theft, as vending machines typically sit in public spaces. Set money aside for these possibilities and include them in your business plan so an unexpected event won’t ruin your business. You can also examine whether small business insurance is a viable option.

Stocking products

Once your business is underway, you’ll have to restock your vending machines as needed. You can streamline this process and reduce travel time by selecting your sites in an ordered sequence instead of choosing locations all over town. Choosing similar products for multiple vending machines will also make your trips more efficient. If you are stocking food or perishable items, note when they will expire and ensure you always replace them in time.

Regular money collection

The most rewarding part of having a vending machine business is collecting profits. Consider doing so while you travel to stock your machines, which saves you time and energy, but also keep a close eye on your accounts. By frequently monitoring your bills, you’ll know when to make the necessary changes to earn more and expand. Business accounting software for small business owners can help you with that and save you precious time and effort.

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Is a vending machine business worth it?

The vending machine industry is an attractive opportunity for first-time entrepreneurs and anyone who wants a passive income. Vending machine business owners can start small with a single drink vending machine and scale their business in a controlled manner to be as large as they choose. With flexibility in time and choices, the vending machine business is something to look into as a full-time business or a side job.

You’re on your way to becoming a business owner

Now that you know how to start a vending machine business, you’re on your way to becoming a business owner. Low startup costs, high-profit potential and increased flexibility are all benefits of joining the vending machine industry.

With a little effort and strategic thinking, you can go a long way without investing too much time, energy or resources in your startup.

For a more detailed look at your opportunities outside the vending machine industry, check out our guide on how to start a business.

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January 3, 2023

Maryland Department of Health announces free Virtual Cottage Food Business workshop

January 3, 2023

Media Get in touch with:

Chase Cook dinner, Performing Director, Workplace of Communications, 410-767-8649

Maryland Division of Well being announces no cost Digital Cottage Meals Enterprise workshop

On the internet education will offer sector guideline updates and suggestions to commence and increase a small business

Baltimore, MD – The Maryland Office of Wellness (MDH) today introduced a cost-free digital Cottage Foods workshop, to be held in partnership with the Southern Maryland Agricultural Advancement Fee (SMADC), on Tuesday, Feb. 7, 2023, from 9:00 a.m. to 10:30 a.m.

This totally free, on-line celebration will give an overview of Maryland’s cottage food stuff legislation and laws. Contributors will become acquainted with the definition of a cottage food items business enterprise and the forms of solutions that can be sold, cottage foodstuff labeling necessities, how to ask for a Unique Identification Amount (applied alternatively of a business enterprise deal with), and how to offer products and solutions at a retail food stuff shop. The workshop will also explore the methods for expanding a cottage meals business enterprise.

Proven cottage food corporations, farmers market place administrators, farm vendors (on-farm stores and stands), retail food stores and everyone who is thinking about starting up a property-dependent food business are inspired to take part to listen to the most recent cottage meals organization rules.

Contributors will master from pre-and-put up tests of regularly requested questions illustrated with situational illustrations, and receive details required to operate a home-based cottage food items organization in Maryland.

The Code of Maryland Regulations (COMAR) defines a cottage food stuff organization as a home-centered business that provides or packages food goods in a household kitchen area and has annual revenues from the sale of cottage food items items in an amount not exceeding $50,000.

For much more information and to register for the workshop stop by www.SMADC.com. Workshop presentation products and back links to the most up-to-date MDH cottage foods rules will be obtainable to watch and download. Or register at EventBrite.

This workshop is manufactured probable by MDH’s Workplace of Food stuff Protection, in partnership with SMADC, a division of the Tri-County Council for Southern Maryland.

For information and facts about SMADC and the Tri-County Council for Southern Maryland, stop by www.SMADC.com.

For a lot more info about Maryland’s cottage foods business, pay a visit to MDH’s Business of Meals Security.

Virtual Cottage Foodstuff Workshop, introduced by Maryland Section of Well being in partnership with SMADC. February 7, 2023, 9:00-10:30 a.m. Sign-up at EventBrite.

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The Maryland Office of Wellbeing is devoted to guarding and improving upon the overall health and safety of all Marylanders as a result of disease prevention, accessibility to treatment, excellent administration, and neighborhood engagement.

Adhere to us at http://www.twitter.com/MDHealthDept and at Facebook.com/MDHealthDept.

December 27, 2022

Death is anything but a dying business as private equity cashes in on the $23 billion funeral home industry

Death is anything but a dying business as private equity cashes in on the billion funeral home industry

Private equity firms are investing in health care from cradle to grave, and in that latter category quite literally. A small but growing percentage of the funeral home industry—and the broader death care market—is being gobbled up by private equity-backed firms attracted by high profit margins, predictable income, and the eventual deaths of tens of millions of baby boomers.

The funeral home industry is in many ways a prime target for private equity, which looks for markets that are highly fragmented and could benefit from consolidation. By cobbling together chains of funeral homes, these firms can leverage economies of scale in purchasing, improve marketing strategies, and share administrative functions.

According to industry officials, about 19,000 funeral homes make up the $23 billion industry in the U.S., at least 80{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} of which remain privately owned and operated—mostly mom and pop businesses, with a few regional chains thrown in. The remaining 20{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b}, or about 3,800 homes, are owned by funeral home chains, and private equity-backed firms own about 1,000 of those.

Consumer advocates worry that private equity firms will follow the lead of publicly traded companies that have built large chains of funeral homes and raised prices for consumers. “The real master that’s being served is not the grieving family who’s paying the bill—it’s the shareholder,” said Joshua Slocum, executive director of the Funeral Consumers Alliance, a nonprofit that seeks to educate consumers about funeral costs and services.

Although funeral price data is not readily available to the public, surveys by the local affiliates of the alliance have found that when publicly traded or private equity-backed chains acquire individual funeral homes, price hikes tend to follow.

In Tucson, Arizona, for example, when a local owner sold Angel Valley Funeral Home in 2019 to private equity-backed Foundation Partners Group, prices increased from $425 to $760 for a cremation, from $1,840 to $2,485 for a burial with no viewing or visitation, and from $3,405 to $4,480 for a full, economical funeral.

In the Arizona city of Mesa, the sale of Lakeshore Mortuary to the publicly traded funeral home chain Service Corporation International led to price increases for a cremation from $1,565 in 2018 to $1,770 in 2021, for a burial from $2,795 to $3,680, and for an economical funeral from $4,385 to $5,090.

“We believe our pricing is competitive and reasonable in the markets in which we operate,” a Service Corporation International official said in an email.

Details of those price increases were provided by Martha Lundgren, a member of the Funeral Consumers Alliance of Arizona’s board. She said funeral home acquisitions have led to the cancellation of pricing agreements negotiated on behalf of consumers who are members of the alliance. In 2020, a cremation at Adair Dodge Chapel in Tucson cost members $395, nearly two-thirds off the $1,100 standard price. But after Foundation Partners Group acquired the funeral home, the member pricing agreement was canceled, and the price of a direct cremation rose to $1,370.

Foundation Partners Group officials said the price increases partly reflect the higher price of supplies, such as caskets, as well as increasing labor costs. But most of the increases, they said, represent a move to a more transparent pricing system that includes administrative and transportation fees that other funeral homes add on later.

“We don’t take advantage of people in there when they’re not thinking clearly,” said Kent Robertson, the company’s president and CEO. “That’s just not who we are.”

A big surge of consolidation happened in the U.S. funeral home industry in the late 1980s and early 1990s, and again around 2010, said Chris Cruger, a Phoenix-based consultant to the industry. And acquisitions have reached a feverish pace in the past two to three years. Many investors are banking on a significant uptick in demand for death care services in the coming years as 73 million baby boomers, the oldest of whom will be in their late 70s, continue to age.

“Sheer demographics are obviously in everybody’s favor here,” Cruger said. Funeral homes have attractive margins already, and combining them into chains to share administrative costs could boost profits even more.

Meanwhile, many funeral home owner-operators are reaching retirement age and have no one in the family willing to take over. A 2021 survey by the National Funeral Directors Association found that 27{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} of owners planned to sell their business or retire within five years.

The desire to sell, combined with the investment money pouring into the field, has driven prices for funeral homes to new heights. Before private equity turned its eye to funeral homes, they were selling for three to five times their annual revenue. “Now I’m hearing seven to nine,” said Barbara Kemmis, executive director of the Cremation Association of North America, a trade group for the cremation industry.

The value in funeral homes lies in more than their brick-and-mortar assets. Funeral home directors are often integral parts of their communities and have established significant goodwill with their neighbors. So when corporate chains acquire these homes, they rarely change the name and often keep the former owners around to smooth the transition.

Tony Kumming, president of the NewBridge Group in Tampa, Florida, helps broker funeral home sales. Many of his clients remain skeptical of the large firms and often will take less money to sell to someone they believe won’t stain their hard-earned reputations. Most former owners plan to live in the community and don’t want their friends and neighbors to be mistreated. “I’m not saying someone is going to take half of what another company is offering,” Kumming said. “But there’s two big pieces to a sale now: That’s money and the right fit.”

Five years ago, when Robert Olthof decided to sell his family’s funeral home in Elmira, New York, he contacted some of the large publicly traded funeral home chains. But as representatives from multiple companies visited him to make their offers, Olthof realized that none of the big chains had sent someone versed in the service side of the business. “They sent their accountants, and they sent their lawyers,” he recalled. “Everything was about the numbers, the numbers, the numbers. And I didn’t like that.”

Instead, Olthof sold to Greg Rollings, a former funeral director who had amassed a privately owned, 90-site chain of funeral homes throughout the Northeast. Rollings had offered less money than the big chains had, but he knew what it was like to be awoken at 2:30 a.m. and put on a suit to go help a grieving family. He knew what it was like to bury a child.

Rob Olthof stands next to a portrait of his father, Robert, in this undated photo. Olthof sold his family’s funeral home in Elmira, New York, to a private owner after finding that the big chains interested in buying him out were more focused on the finances than the service side of the business.

Rob Olthof

“I can’t put a dollar-amount value on how much it’s really worth selling to a person who is a funeral director themselves,” Olthof said. “Because moving forward, your name is still going to be on the front of that building.”

Victoria Haneman, a Creighton University School of Law professor who studies the funeral home industry, worries that new corporate ownership might be devastating for grieving families. “They are not behaving like normal, rational consumers,” she said. “They’re not bargain-shopping because death is viewed as an inappropriate time to bargain-shop.”

For most families, a funeral will be one of the largest expenses they ever incur. But they often enter the shopping process cognitively impaired by grief and unsure of what is customary or appropriate.

Only 1 in 5 consumers visit more than one funeral home to obtain a price list, according to a 2022 survey commissioned by the Consumer Federation of America. And online comparisons are virtually impossible—a study by the federation and the Funeral Consumers Alliance found that just 18{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} of the funeral homes they sampled listed their prices on their websites. As a result, families generally lean heavily on the expertise of a single funeral director, who has a motive to sell them the most expensive options. So consumers can be pushed into buying packages for open-casket funerals that include embalming and other services that drive up the cost and may be unnecessary.

“Is that sort of pickled, shellacked, cosmetized, preserved corpse where the future will be? I don’t know that the answer is ‘yes,’” Haneman said. “And I think there are investors who are betting that it’s not.”

Foundation Partners Group is a prime example. Backed by the private equity firm Access Holdings, the funeral home chain shifted five years ago to acquiring funeral homes with high cremation rates. Cremation rates nationally have been steadily climbing over the past two decades, with nearly 58{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} of families now choosing cremation over casket burials. Foundation Partners expects that rate to hit 70{1668a97e7bfe6d80c144078b89af180f360665b4ea188e6054b2f93f7302966b} by 2030.

The company has acquired more than 75 businesses in high-cremation states, including Arizona, California, Colorado, and Florida. Most of those funeral homes average a bit over 150 funerals per year.

Individual funeral homes “don’t have access to marketing budgets, they don’t have access to safety and health plans and benefits and these different things,” said Robertson, the Foundation Partners CEO. “And because we have the ability to drive marketing and do other things, we also take that 150-call firm to maybe 200 calls.”

Robertson said the funeral home industry is different from other sectors that private equity firms might consider investing in, describing it as a calling comparable to working in hospice care. Foundation Partners is fortunate their backers understand the service part of the industry, as well as the financials, he said. “Private equity firms aren’t necessarily known for having deep compassion for people. They’re more known for their financial returns,” he said. “To get both is really important.”

Foundation Partners owns Tulip Cremation, an online service that allows people to order a cremation with just a few clicks—and without having to set foot in a funeral home. Tulip currently operates in nine states where Foundation Partners has funeral homes. The company expects the service to eventually operate nationally.

Haneman said innovative approaches like Tulip’s are sorely needed in the funeral home industry, which has barely changed in 100 years. “It’s absurd to me that the average cost of a funeral is running $7,000 to $10,000,” she said. “People need less expensive options, and innovation is going to get us there.” Tulip charges less than $1,000 for a cremation; ashes are mailed back to the families.

Other online cremation services are Solace Cremation, Smart Cremation, and Lumen Cremation.

“Private equity investment has the potential to go one of two directions: It’s either going to entrench status quo and drive price, or the purpose of the investment is going to be disruption,” Haneman said. “And disruption promises the possibility of bringing more affordable processes to market.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

Correction, September 23, 2022: This article was updated to to correct the spelling of Greg Rollings’ name.